Corker: All we asked is that the UAW give us a date by which it would become competitive

posted at 3:06 pm on December 12, 2008 by Allahpundit

But of course that was asking too much, because evidently the UAW prefers the risk of bankruptcy and mass layoffs to further pay cuts. Their excuse:

The sticking point apparently was the union’s refusal to agree to lower wage and benefit rates as soon as next year.

Representatives for the union, which had already accepted a series of cuts in its current contract, sought instead to push any more concessions back to 2011, when the U.A.W.’s contract with Detroit auto companies expires.

In a statement Thursday night, the union said it was “prepared to agree that any restructuring plan should ensure that the wages and benefits of workers at the domestic automakers should be competitive with those paid by the foreign transplants. But we also recognized that this would take time to work out and implement” using programs like buyouts and early retirement offers to bring in new workers at lower rates.

Would the union have agreed to Corker’s plan if they didn’t have Bush waiting in the wings to bail them out with TARP money? (Yup, says Corker.) After all, TARP is a sweeter deal for them than Corker’s bill since, as one White House source noted, the loans come with few strings attached. Thus have the inefficiencies of the initial Wall Street bailout made this bailout more inefficient, too. Watch, then read on.

Two points about all this. One: If Bush is going to bite the bullet and release the TARP money (legally or not), why not blame it on Obama? Call a presser, affirm that he opposes funding the Big Three without stringent restructuring requirements, then humbly declare that he doesn’t want to complicate life for the incoming administration by sinking the auto industry knowing they support a bailout. The media’s constantly whining anyway about the lag time between the election and The One’s ascension to the throne. Point to that and frame the bridge loan as a grudging measure necessary to an orderly transition.

Two: I made this point before in the context of the Wall Street bailout, but let me make it again. Is anyone in the GOP leadership weighing the costs of action versus the costs of inaction or are we running on pure dogma here? I keep thinking about Mitch McConnell saying yesterday that he’ll oppose the bailout even though it’s “impossible to know” what the consequences of bankruptcy would be. Hey, Mitch? Not good enough. No one’s asking for absolute certainty on the outcome, which really is impossible; what I want is a good-faith attempt at assessing costs, benefits, and probabilities of all courses of action. If they’re convinced that economic catastrophe is inevitable and don’t want to burn any more taxpayer money trying to deflect the asteroid, that’s fine. If, on the flip side, they think the consequences of letting the Big Three fail and losing a million jobs in this economic climate won’t be that bad, that’s fine too. Both are good reasons to oppose a bailout. But make the case. Explain to me why, in the middle of a global economic crisis, propping up a failing industry to save jobs at least until the crisis is over is a worse option than pulling the plug now. The prospect of being taxed to support a $100 billion rescue of the auto industry is awful, but not nearly as awful as the cascade effect of consumer purchasing power drying up and me losing my job as part of a $500 billion hit to the economy. Is that what we’re looking at here or is it something less, or more? My sense is that both sides are uninterested in exploring the question, and that our side is content to repose religious faith in the divine market to arrive at the least painful solution. Can I at least see some numbers before I take communion? If not, then this really is much a crisis of political leadership as it is a financial one.


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One more thing: If the UAW, SEIU, UFCW, and others of their ilk had saved that $40 mil instead of trying to buy themselves some sympathy in Washington, they’d have a hell of a head start on funds for retraining their members in new careers as the economy changes. Too bad Gettelfinger et al’s mansions in the suburbs are more important to union management than than the future of the union worker.

n0doz on December 12, 2008 at 8:00 PM

Alternate History time: What if 30 years ago we didn’t do the Chrysler thing? Two domestic automakers, maybe bigger market share.

The R’s are going to lose on this one. The media is not going to educate anyone on the nuances of bankruptcy law, on the choices that a government could have.

Fox News (yeah, the conservative one) just had what may as well have been a infomercial for the UAW about all the terrible collateral damage that will happen. The friendly UAW guy interviewed going on about how these are just average folks with houses and everything and the economy will collapse w/out them.

There’s no way they’re not getting money…it would be UnAmerican not too.

r keller on December 12, 2008 at 8:01 PM

With all due respect to Allah, and I am not trying to be snarky here like some of your commenters, but you are totally missing the point with your question (paraphrasing here) “has anyone calculated the costs of not giving Detroit their $100 billion bailout?”.

First: Ford and GM, according to recent WSJ article, have burned through $500 billion in debt and equity in the last decade, which was a economically prosperous period of time. What makes you think $100 billion will make them prosperous and avert that $500 billion loss in GDP?

Second: Answer: There will be no viable domestic industry won’t unless their cars are competitive. The only way to make the cars competitive at this point is to force big three to lower costs of the cars by lowering wages, shedding dealerships, lowering tinterest costs by shedding debt. Do you not understand that that is what Corker and McConnell are demanding?? The proposal Republicans defeated had no promises – NONE.

Third: A bailout with no conditions just kicks the can down the road. Allah will be asking in another 18 months – can we afford not to inject another $100 billion in???

If $100 billion in government spending could create $500 billion out of nothing, we’d all be rich.

Allah, relax – you are just having a panic attack.

chris999 on December 12, 2008 at 8:04 PM

Just say no to any bailouts as a matter of principle. The suto companies can go into Chapter 11 reorganization, and the sooner the better. Geting into arguments over UAW “compromises” makes the GOP appear anti-union when in fact bailouts delay the needed Chapter 11 proceedings.

Phil Byler on December 12, 2008 at 8:11 PM

The bailouts not only delay Ch 11, they make the eventual 11 even more expensive.

n0doz on December 12, 2008 at 8:20 PM

I’m from TN and know Corker. He is a successful businessman, was mayor of Chattanooga and ran it well and knows what the problem is with the UAW. If Bush caves we are truly done for.,

wepeople on December 12, 2008 at 8:27 PM

The R’s are going to lose on this one. The media is not going to educate anyone on the nuances of bankruptcy law, on the
choices that a government could have

They just want to be the ones who finished Reagan’s mission to bust unions. Then they’ll bail out more banks of Paulson’s choosing.

sethstorm on December 12, 2008 at 8:28 PM

n0doz on December 12, 2008 at 7:55 PM

Toyota couldn’t make affordable muscle without the L if it had to. When they appeal to the Detroit metal’s most devoted fans, then the transplants can start speaking.

sethstorm on December 12, 2008 at 8:49 PM

Why is it that the right never is willing to talk about the people who buy and pay members of their own party. All the southern GOP senators who voted to stop this from moving forward, including the supposedly hated Grahmnesty, come from states that are manufacturing bases for foreign auto corporations.

Interesting isn’t it. The part of the nation that is the most anti-union, also has the most foreign manufacturing plants. But beyond even that. They are representating their individual states business interest in the oddest way possible. They are actually attempting to further marginalize an American company in favor of the economic interests of those foreign corporations (who receive federal subsidies and who live in nations with national healthcare systems). Why are they allowed to blatantly lie and pretend as if these foreign manufacturers and their role as employer isn’t the sole reason for their non-support of the auto bailout. Even more ridiculous? Considering that the GOP is about to enter a long term minority positoin in terms of congress. It’s clear all these guys care about are winning their seats in 2, 4, 6 years. Southern GOP senators have a secure position..but it’s getting less secure and they could care two hoots about anything but their own political futures. And that means appeasing foreign corporations over American ones.

What’s the definition of treason again? I’m sure we aren’t going to say that Toyota is a legit constituency for Corker. And yet.

DeathToMediaHacks on December 12, 2008 at 9:29 PM

DeathToMediaHacks

Let me guess… You don’t live in the south?

bluetick on December 12, 2008 at 10:09 PM

Let me guess… You don’t live in the south?

Lived in the Plano suburb of Dallas for 8 years. Lived in Tallahassee Florida for 4 years.

DeathToMediaHacks on December 12, 2008 at 10:15 PM

Maybe I am missing something (and I haven’t followed this moment by moment), but myunderstanding is correct, this never made it to a vote in the Senate. The Senators that “come from states that are manufacturing bases for foreign auto corporations” did not vote on this one way or the other.

It seems that some of Corker’s reasoning had to do with the desires of his constituents in the Volunteer state including automotive plant workers. I am inclined to believe him.

bluetick on December 12, 2008 at 10:24 PM

The Senators that “come from states that are manufacturing bases for foreign auto corporations” did not vote on this one way or the other.

Break out the old civics testbook. It takes at least 60 votes to stop debate on a bill. The current Senate is close to even and there weren’t enough votes to end debate and bring it to the floor for an up or down vote. And you had a few Republican senators from the midwest who supported the bailout, but they couldn’t get their southern colleagues inline.

And this is the point. The supposedly “liberal bias” media is only barely covering this aspect of the vote. Fox has totally ignored it. CNN mentioned it briefly. And I can’t bring myself to actually watch MSNBC (except for Maddow who brought it up a ton) but I doubt that *shudder* Chris Matthews or Olby brought it up. But we have no problem demonizing an American union and supporting the politicians whose interest serve foreign owned car companies.

DeathToMediaHacks on December 12, 2008 at 10:27 PM

Just to clarify, the reason the bill was killed was because it lacked the votes to end the debate.

DeathToMediaHacks on December 12, 2008 at 10:28 PM

I don’t have too much sympathy for the UAW. I suppose I was too easily influenced by Henry Hazlitt’s “Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics”. Maybe you ought to consider reading it.

I voted against Corker in the primary election a little over two years ago. Barring something unforeseen, I’ll donate money to him for 2012 if he faces any serious challenger.

I bet a reliable poll would reveal a large majority of Tennesseans are happy with Corker’s handling of the attempt to bailout the UAW.

bluetick on December 12, 2008 at 10:39 PM

Exactly what I said. Corker cares about nothing but his political future. Even if it could have devastating effects on the economy.

DeathToMediaHacks on December 12, 2008 at 11:08 PM

Maybe Sen Coker could talk Rep McCotter down off the ceiling?

Dr Evil on December 12, 2008 at 11:08 PM

Corker

Dr Evil on December 12, 2008 at 11:09 PM

F da UAW. F ‘em bad.

Jaibones on December 12, 2008 at 11:42 PM

The Democratic plan of asking nothing of the UAW and putting a political control (car czar) seeking to maximize votes rather than profits and efficiencies would just have opened a bleeding wound further and the taxpayers would have been bled to death. Corker’s comprimise was the only way to heal the wound and allow the companies to rebuild their economic health without crashing down too hard on the big threes suppliers and their employees. Sadly, Paulson and Bush undercut him too soon and we will never know if the UAW would have given in enough to save the companies for the long haul; since Bush allowed them to duck any hardship in the short run.

KW64 on December 12, 2008 at 11:47 PM

DeathToMediaHacks

Let me guess… You don’t live in the south?

bluetick on December 12, 2008 at 10:09 PM

While you are awake in this world DeathToMediaHacks is asleep in another one.

Tav on December 13, 2008 at 12:44 AM

Red Planet makes the best comment about the UAW.

They are so worried about the stigma about a bankrupt car company that no one will buy their products.

What about producing a product someone will want?
What about service after purchasing the product?

Too late BIG 3. My business goes to those that have pride in their craft and produce a great product….. Say HONDA!

Kini on December 13, 2008 at 3:39 AM

Yes, the UAW needs to be held to account for all the financial blackmail they have committed on the American public for many years now. They need to be forced to become competitive or they will not do it.

Hawthorne on December 13, 2008 at 5:49 AM

Kini on December 13, 2008 at 3:39 AM

You are just another misinformed parrot. The American auto companies have been making cars that compete well with Japanese and German products on repair rates for a decade now. You are spewing obsolete thinking and presenting it as fact. Please go do some research about repair rates and overall repair costs then try to tell me if your statement is still true.

Hawthorne on December 13, 2008 at 5:52 AM

Allahpundit, please do remember that bankruptcy does not necessarily mean the company closes down. How many airlines have gone into and come out of bankruptcy in the last 20 years? GM, if it really is viable with or without the UAW, can come out of bankruptcy, too. But GM needs the elbow-room of a bankruptcy along with the pressure on the UAW for it to become economically viable.

Dumping money into it now simply fuels inflation, keeps a zombie alive another short while, and wastes your money and mine.

Dumping money into GM simply defers the inevitable. With the UAW master contract around its neck today GM cannot survive without continual governmental subsidies. And once those subsidies come in the UAW will simply keep raising the ante since they are now feeding off the government teat.

{^_^}

herself on December 13, 2008 at 6:12 AM

UAL United Airlines went bankrupt and is still around. Going bankrupt is not necessarily the end of a company, especially a big company. I think (I’m not an expert) that GM would come out of bankruptcy stronger and better. Chrysler would probably not make it through. Left with a pared down, lean and mean GM and Ford, I think that eventually, the American companies could beat the Japanese and increasingly the Koreans. Or at worst give them a good run for their money which would benefit all car buyers.

If the government gets any kind of significant control of GM and/or Chrysler via a bailout that does not render the companies leaner and meaner and smarter, they are doomed anyway.

The other issue is that if the bailout only postpones the inevitable, it would be better to get it over with now instead of tanking the economy when it is on the path of recovery.

And we need to understand that what is really wrong with the big 3 is manifold: Poor management (especially supply chain); ridiculous union-created work rules that destroy productivity and flexibility; and the dollar cost of union contracts per vehicle produced.

If a bailout aggressively addresses those items (and there are others) then it might be worthwhile. If a bailout is just an handout, then it will be an epic fail. I for one, will not by a car built by robbing taxpayers.

DrDeano on December 13, 2008 at 5:07 PM

They are actually attempting to further marginalize an American company in favor of the economic interests of those foreign corporations (who receive federal subsidies and who live in nations with national healthcare systems).

When did Japan, Germany, etc start providing nationalized health care to South Carolinians, and other southerners?

These senators aren’t marginalizing the American car companies, they’re doing a good job of that all on their own by paying too much and by being too inefficient. Dump the unions, come up with a realistic compensation package, and stop telling Tom he has to let Jim tighten a lose screw instead of letting Tom do it himself. What’s the worst that could happen? Failure? Too late, you’re already there.

xblade on December 14, 2008 at 6:20 PM

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